Unions urge Labor to increase super to 15 per cent

Unions are demanding that a Labor government fast-track increases in superannuation from its first year and legislate a target of 15 per cent employer contributions by 2030.

The Transport Workers Union and the Construction, Forestry, Maritime, Mining and Energy Union are driving the push as part of a broader amendment to the party's platform at its national conference this weekend that would kick for-profit funds out of the $2.7 trillion superannuation system.

The proposal, which would also require Labor to preference industry funds when looking to finance government projects, has the full backing of the union movement.

However, it could meet resistance from the Labor parliamentary wing, including treasurer Chris Bowen, who has said he is "not interested in advantaging one sector of super over the other".

Opposition financial services spokeswoman Clare O'Neil said the party was "looking forward" to discussing super policy at the conference.

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"Our movement built superannuation, we are proud of it and many people at national conference will be engaged in a conversation about how to improve it – that's a good thing and that's a healthy political party in action," she said.

She said the Hayne royal commission and the Productivity Commission had "laid plain the fact that there are issues".

"For example, millions of Australians are stuck today in underperforming accounts. Unpaid super is rife and the government hasn't done anything about it for five years".

Annual super increase of '0.75 per cent'

The Gillard government had legislated increases in super contributions to 12 per cent by 2019 but its plans were disrupted when the Abbott government froze super at 9.5 per cent in 2014.

The party's current platform says a Labor government will end the freeze "when prudent".

But the final wording of the TWU-CFMEU's proposal removes "prudent" and calls for a Labor government to expedite increases so that super reaches 12 per cent in three to four years.

"Labor's first budget upon returning to government will increase the superannuation guarantee by 0.75 per cent, and by 0.75 per cent each year thereafter until 12 per cent is achieved," the amendment said.

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If a majority of the 397 party delegates vote for the resolution, a Labor government would also have to legislate a path to 15 per cent super contributions by 2030 in its first term of government.

Australian Industry Group chief executive Innes Willox said raising the super guarantee would "lift the costs of employment and slow investment and the pace of job creation".

"To avoid these outcomes, the higher superannuation guarantee would need to be offset by combinations of higher productivity and slower real wages growth over the phase-in period."

Industry funds to get investment priority

As reported by The Australian Financial Review in November, the TWU and CFMEU will seek to ban for-profit funds from super on grounds their profit incentive makes them conflicted.

The unions' proposed amendment will ensure super funds are only "all profit to members" funds, with equal employer and union representation, and require that "any projects they invest in must comply with agreed labour standards and practices".

Further, a Labor government "will ensure that where government is seeking finance for projects it gives priority to Australian all-profit-to-members industry superannuation funds for investment".

Mr Kaine said "superannuation was not dreamt up to provide dividends to shareholders and it certainly wasn't dreamt up to make banks and their CEOs richer".

"The banking royal commission exposed this inherent problem. Now we need to act to ensure people are able to retire in dignity without having their superannuation siphoned off because of greed and governance deficiencies."